All Forum Posts by: Jon Kelly

@Leo Lopez, tenants care about (1) rent and (2) customer service. Assuming you nail those, one additional thing I've tried is offering a "free upgrade" at each year's renewal. Let the tenant choose one free upgrade from a list of 3-5 options of low-cost upgrades you will do at no cost to them, such as: installing a ceiling fan, upgrading landscaping, installing a new front door, etc. 

The idea is for the " free upgrade" to add value to your property, while continuing to build upon your relationship with the tenant. 

@Justin Mayne tough situation. So she has a lease for both units at $1,400, then signed an agreement relinquishing access to the main house? Sounds like there was never an agreed upon price for the unit above the garage. It would be tough to argue that she should pay $1,400... I would likely either (1) agree on a price somewhere between $425 and average rent for the unit ($600-700), maybe $525?, or (2) accept the $425 and raise the rent or find a new tenant when the lease is up. You're fighting for an extra $125/mo, which is $2,250 over 18 months. It's not a huge amount in the grand scheme, and you may end up spending more than $2,250 if she damages the unit or stops paying rent altogether... I hope you're able to make money from the 3rd unit! Good luck! 

@Emily Schultz, Banks will lend to an LLC, but it will be a commercial loan instead of residential. The interest rate will be 1-1.5% higher, which is likely insignificant. An easier way may be to keep the property in your name and purchase an umbrella insurance policy for liability protection. As you build your empire, you can continue to add additional properties to be covered by the umbrella policy. There's no wrong way to do it. Don't let it slow you down as you build your empire!

"Winners focus on winning, losers focus on winners" - Conor McGregor

"The graveyard is the richest place on earth, because it is here that you will find all the hopes and dreams that were never fulfilled, the books that were never written, the songs that were never sung, the inventions that were never shared, the cures that were never discovered, all because someone was too afraid to take that first step, keep with the problem, or determined to carry out their dream." - Les Brown 

"Can't Hurt Me" by David Goggins. So many other good ones, but the bottom line is you need to have a "why" in life and take action! Losing 40 pounds in 6 months is no small task, congratulations! 

@Praveen Balaji The quality of the paint job is more important than considering "agreeable gray" vs. beige. If the painting looks good, I would leave it, and consider switching to your PM's recommendation when you need to repaint next. The recommendation is likely a good one, but as your PM noted, it's "low priority." Close on the deal, get your first tenants and then start worrying about smaller items like paint color! Good luck! 

@Warren Smith Local is preferred if you can find the right one. Local lenders usually have less restrictions and can be more forgiving on guidelines. There should be less restrictions for commercial loans instead of residential. I'm closing on a cash out refi now with an out-of-state lender and the only requirement they have is that I open a bank account with them. Call as many local lenders as you can to find the right one. Best of luck! 

@Weng L. These are additional restrictions that many lenders have put in place, but not a broker specific rule. One of my main lenders put a halt on all residential investment properties... However, my other lender is still offering cash-out refis. It's a small local bank, so they appear to be more flexible. Try to reach out to as many small local lenders as possible and you may find one that works for you! 

Maybe they're more comfortable living there knowing you live there too? Good news is that you will have a strong tenant for at least one year. Overqualified tenants have a higher likelihood of taking care of your property, so turnover costs should be low. The rental situation in 1 year should be stronger than it is today... Rent to them and they may surprise you and stay longer! 

@Sergio Martinez At the beginning of COVID-19 problems (~March), I considered allowing tenants with potential payment concerns to do cosmetic improvements (e.g. paint, light landscaping, etc). Luckily, it never got to that point. I would never consider a major renovation such as a kitchen remodel. 

In my opinion, there are two other considerations in addition to the concerns many already mentioned:

1. Evictions are still halted in NY, and there's no definitive timetable on when you will be able to evict. In other words, you are stuck with "bad" tenants... 

2. Why would you renovate a unit while "bad" tenants are still there? You mentioned "it's been a struggle for them all along," "messy", "over $6K in back rent." You might spend another $5-10K on the kitchen and then it could be ruined by the time you are able to evict them... 

Tough situation for sure and I wish you the best of luck!